New research reveals that London’s small to medium sized businesses have been some of the hardest hit by Covid in the UK, with those surveyed saying it has cost them, on average, £1.2 million in lost revenue or income over the last year.
Despite this toll, there are clear signs that their overall confidence is on the up — with almost half (49%) of local SMEs surveyed saying they are more confident today about the future of their company compared to this time a year ago. This indicates that the business landscape in London may have turned a corner after a tough year.
The new research from CitySprint, the UK’s largest same day distribution company, also finds that almost a third (32%) of SMEs polled in London say their business is in better financial shape compared to 12 months ago.
In an understandably difficult year, the survey of business decision-makers and leaders also reveals that over the last year, SMEs have looked closer to home for the support they have needed to survive: 67% of respondents say they have looked more locally for their business needs compared to the year before with 44% of these seeking suppliers from the local area and 38% looking for local financial support. A further 49% also said that the significance of collaboration with local businesses has increased, while 84% believe local support will benefit their business over the next 12 months.
Looking further ahead, 42% of London SMEs surveyed plan to grow their customer base locally over the next 12 months, again underlining the local opportunities for growth available as we move into recovery. Meanwhile, half (51%) say they are looking across the UK, while over a quarter (28%) say they are also looking at international trade.
Commenting on the findings of the London survey Rosie Bailey, Commercial Director at CitySprint, said: “It’s clear that with signs of the recovery on the horizon and the worst of the pandemic hopefully over, businesses in the area are feeling more optimistic about the year ahead. This is thanks — in no small part — to local partners, suppliers and support schemes, with London’s SMEs working together to support each other in navigating the challenges and hurdles of the last 12 months. Long may this continue.”
Despite the renewed optimism, executives still believe conditions will remain challenging for London’s smaller businesses over the coming year, with 81% saying that activities have been put on hold, delayed or restricted in some way as a result of Brexit uncertainty over the past three years. These include things such as business development, collaboration with other businesses, improving sustainability and investment in people, products and technology.
The twin factors of Brexit and Covid have also thrown a spotlight on supply chains, with 42% saying logistics and/ or their supply chain have become more important to their business over the last year. This is especially pertinent given more than one in four (29%) say their supply chain extends internationally in Europe and other parts of the world.
35% of London SMEs surveyed have revealed they are increasing partnerships in the UK to mitigate risks in light of Brexit for those whose supply chains extend to Europe, while 34% are investing in communications to customers to make them aware of any potential impact of Brexit.
To help them unlock opportunity over the coming year, more than a quarter (28%) of SMEs in London say more local Government support, in the form of information grants, advice etc, would help their business, while 22% say they would most benefit from having access to a better quality of local suppliers.